Oil Prices Rise Towards $85 Per Barrel

Oil prices extended gains into a fourth session on Wednesday, buoyed as industry data showed a surprise decline in U.S. crude inventories and as geopolitical tensions over the disappearance of a prominent Saudi journalist stoked supply worries.

U.S. West Texas Intermediate crude was 72.17 dollars a barrel on Wednesday while Brent crude was, 81.77 dollars a barrel.

U.S. crude inventories fell by 2.1 million barrels last week, compared with analyst expectations for a build of 2.2 million barrels, American Petroleum Institute data showed after Tuesday’s settlement.

“The market is reacting to the unexpected decline as inventories tend to rise at this time of year,” said Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting in Tokyo.

U.S. gasoline stocks dropped by a larger-than-expected 3.4 million barrels, while distillate fuel stockpiles declined by a smaller-than-expected 246,000 barrels, the API data showed.

Inventory data from the U.S. Energy Department’s Energy Information Administration is due on Wednesday.

U.S. President Donald Trump gave Saudi Arabia the benefit of the doubt in the disappearance of journalist Jamal Khashoggi even as U.S. lawmakers pointed the finger at the Saudi leadership and Western pressure mounted on Riyadh to provide answers.

Saudi Arabia has committed to conducting a complete investigation into the disappearance, U.S. Secretary of State Mike Pompeo said before departing the kingdom for Turkey.

Jim Ritterbusch, president of Ritterbusch and Associates, said Saudi Arabia could cut as much as 500,000 barrels per day of crude production “as a warning shot should the U.S. opt to impose any type of sanction in response to the Khashoggi developments”.

A claim by the U.S. that it aims to reduce Iran’s oil exports to zero is a “political bluff”, the head of the state-run National Iranian Oil Company was quoted as saying on Wednesday.

U.S. sanctions on Iranian oil exports are due to kick in on Nov. 4, while Iran has accused Saudi Arabia and Russia of breaking an OPEC-led agreement on output cuts by producing more crude.

PM NEWS